Retail Observer

RETAILOBSERVER.COM DECEMBER 2021 54 A s you're drinking coffee and reading this article, you're probably waiting on product you ordered months ago. Maybe it's upholstery or a bedroom set. Maybe it's the dining room table for Mrs. Jones that was supposed to arrive three weeks ago. This has been the story for every retailer I've spoken with over the past six months. Rather than focus on the "why" of our current supply chain struggles, I want to instead focus on the what: What products are being impacted most, and what's happening once products arrive in the U.S.? There's a lot to uncover here, so let's dive in. OVERSEAS PRODUCTION The Asian supply chain is under duress, to say the least. Most major factories are continuing to struggle to stay open. Government shutdowns of cities are the major cause, as workers are just not able to go to work. As the shutdowns persist, residents aren't even allowed to move about as cities enforce "No Mobility" acts. Citizens are basically stuck at home. How are manufacturers navigating this issue? By creating "tent cities" to house workers. This is a viable solution and it's working, but the pain point is that workers aren't willing to live for months in tents. A manufacturing plant that usually employs 15,000 is housing roughly 5000. And it's slowing production at a time when consumer demand has been at an all-time high. I do feel we're at the peak and on the way back down, but these constraints will continue to be an issue into the early stages of next year. PRODUCTS THAT ARE IMPACTED: • Imported Bedroom and Dining Room are the products currently feeling the most pressure from the overseas production issues. • All wood veneer products are affected and will continue to be an issue well into 2022. • Domestic Upholstery lead times are improving as raw materials are becoming available, but major manufacturers are still seeing lead times that are months out as backlogs have reached historic highs. Relief will come in 2022, but not until the back half. RECORD NUMBER OF SHIPS Overseas production is roughly moving at a 30% to 40% pace. Containers are being shipped to the US, but what happens when the ships arrive? Let's look at the largest port in the US, the Port of Long Beach in Los Angeles. At this writing, the port had over 70 ships anchored waiting to be unloaded by crane operators, filled with containers waiting to be delivered by truck. Any one of these ships can carry 10,000 containers at a time, so a bit of quick math tells us that roughly 700,000 containers are waiting to be unloaded. The main issue we're all facing is people. In a normal environment, there would be one or two ships anchored in the harbor while three crane operators were unloading a ship docked at the port. Truck drivers would be lined up ready to pick up and deliver the containers. The process usually takes a day to unload all the containers onto trucks. In today's world it's taking up to 17 days! One crane operator unloading a ship, and a shortage of truck drivers is compounding the struggle. What we're seeing is a growing bottleneck at the ports, and the ships have nowhere else to go, so all they can do is wait. Unfortunately, this isn't a quick-fix situation, and I don't see it improving until the back half of 2022. Are there major issues with our supply chain currently? Absolutely! But despite the challenges our industry is thriving. We're seeing record month after record month. Product is arriving, and not all manufacturers are having major delays – at least not on all their products. My suggestion is to do your research. Don't be scared to forecast out months in advance and look outside your normal manufacturers. There are vendors who are thinking outside the box and truly supporting the independent channel, which is always a smart move on their part. C.O.V.I.D: "CONTAINERS OVERSEAS ARE VEXING INDEPENDENT DEALERS" Jeff Rose Furniture Trends Jeff Rose, Sr. Director, Furniture & Bedding, Nationwide Marketing Group RO

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